Back in 2018 I did an experiment.

I wanted to see - what's the return on buying Lotto regularly?

So I purchased Lotto every week for an entire year.

The process was pretty simple.

I picked a bunch of numbers based on friends' birthdays and things like that.

Then I set up an auto-buy on mylotto.co.nz for 4 lines at $1.50 per line, playing the Powerball every Saturday.

How would Lotto compare to say, just buying an index fund?

What Are The Odds?

Thankfully, we don't need to calculate our odds.

Lotto has already done it for us.

Here are the odds for winning Lotto Division 1 through 7:

As someone who is an avid matched bettor, odds are something I love looking at.

Keeping in mind each line of Lotto (without Powerball) costs 70 cents, here we can see the following:

For every 35 lines (cost $24.50), we should win 4 bonus lines (value $2.80)

For every 363 lines (cost $254.10), we should win $22.

For every 485 lines (cost $339.50), we should win $30.

For ever 7,754 lines (cost $5,428), we should win $55.

For every 19,386 lines (cost $13,570), we should win $601.

For every 639,730 lines (cost $447,811), we should win $19,995

For every 3,838,380 lines (cost $2,686,866) , we should win $350,000.

You would need to play almost 3.8 million lines before you win Division 1.

Not to mention to play 3.8 million lines, at 10 lines per week, would take you 7,381 years.

As you can see, odds look pretty dismal.

Powerball is slightly different.

For every 352 lines (cost $528), we should win $15 and 4 bonus lines (value $21)

For every 3,635 lines (cost $5,453), we should win $40.

For every 4,846 lines (cost $7,269), we should win $57.

For ever 77,543 lines (cost $116,315), we should win $107.

For every 193,858 lines (cost $290,787), we should win $1,155.

For every 6,397,300 lines (cost $9,595,950), we should win $37,252

For every 38,383,800 lines (cost $57,575,700)  we should win $11 million.

To put that in perspective, to win Division 1 Powerball, you would need to play 38,383,800 lines, which would cost you $57 million and take you around 74,000 years, and you will win $11 million when you finally win.

In other words, it would take you 7,400 lifetimes to win, and you will lose $46 million when you finally do.

Of course - this assumes you win on the very last attempt of the probabilities playing it. 

It's possible you win on the very first attempt. 

But just remember, you have a 1 in 38 million chance on each line.

My results

I didn't actually run these odds before the experiment. I just worked them out now.

So I was still hopeful maybe I might win something.

Overall the experiment cost $312 ($6 x 52 weeks).

Over the year I won four times.

One of them was a $15 win.

The others were bonus ticket wins.

Because a bonus ticket is worth $6, you could say those wins were worth $18.

So total winnings were $33.

Over one year that's a total return of -89%.

Not great!

Using our compound interest calculator, we can see what our $312 could have done otherwise:

If we play Lotto every week, we'll have $351 after 20 years.

If we put it into a 2% savings account, we would have $7,665 after 20 years.

If we put it into an NZX 50 Index Fund, we would have $20,422 after 20 years.

Moral of the story: Don't play Lotto!